Banks are facing a serious threat from internet payment systems such as Paypal, Nutmeg and even Bitcoin, warns top accountant EY.

Almost a third of Britons (31.8 per cent) – including many of the youngest and wealthiest customers of banks – have made use of some kind of online payments service.

The figure is almost double the average rate of use across the world’s developed economies – suggesting that British banks have most to fear from internet upstarts.

Clash: Almost a third of Britons have ditched traditional payment methods for an internet alternative

The findings emerged from research by EY’s financial technology division which has been commissioned by Chancellor George Osborne to study how Britain compares to other countries for new technology and finance.

Imran Gulamhuseinwala, head of the EY Fintech division, said: ‘The people most open to this kind of service are young and they have high incomes. Even if this is a short-term trend this is a significant threat to the banks.’